Plant Prefab 2021 Corporate Sustainability Report

Corporate Sustainability Report 2021

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Contents

Design by Metro Design Group Cover: Design by The Brown Studio

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A Message From Our Founder

2021 Company Carbon Footprint

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Our Projects

Our Operations

06 Statistics and goals 08 Feature: Better Materials, Better Homes

10 Statistics and goals 12 Feature: Growing With Integrity

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Our Supply Chain

Our Employees

14 Statistics and goals 16 Feature: Overcoming Challenge With Collaboration and Teamwork

18 Statistics and goals 20 Feature: Investing in Our Most Valuable Asset

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A Message From Our Founder & CEO

2021 marked an important inflection point for Plant Prefab.

We completed a $30 million Series B financing round, opened our second factory, and began work on our third—an automated, solarpowered production hub that will dramatically increase our capacity, enabling us to execute larger projects and serve the entire Western U.S. We grew our team from the production floor to the C-suite, facilitating our expansion into new markets and service offerings. We further refined our Plant Building System™ and improved our Plant Virtual Build Process™, workmanship standards, and product performance targets.

Amidst our growth—and unprecedented market challenges—we’ve upheld our values, honoring our commitment to operate in the most responsible way possible for people and the planet.

We dedicated even more resources to workplace risk mitigation and employee retention, helping maintain an excellent safety record and best-in-class illness prevention. We continued to offer strong benefits and bonuses to all regular, full-time employees, and we expanded opportunities for workplace training and development. You can learn more about this on page 20.

We stood firm on our commitment to using healthy and sustainable materials (see details on page 8), and as we expanded our operations, we found ways to reduce our resource consumption and carbon emissions by becoming even more efficient (learn how on page 12).

We greatly appreciate your support, and as always, we welcome your feedback and comments. Together, we continue to build a better world, by design.

Steve Glenn Plant Prefab Founder & CEO steve@plantprefab.com

2 Design by Ray Kappe, FAIA

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2021 Carbon Footprint In 2019 Plant Prefab made a bold commitment to achieve carbon-neutral operations. We produced our first comprehensive carbon footprint for our 2020 emissions and we purchased offsets to requite our impact. We repeated this process for 2021.

Though such offsets do achieve carbon neutrality, the spirit of our pledge is to continuously reduce emissions throughout our value chain, accelerating the transition to a net-zero carbon economy. Our 2021 record is shared below, and you can learn about our 2021 carbon reduction efforts on page 12.

Category

Metric Tons CO2

Scope 1: Direct Operational Emissions

8.44

Scope 2: Indirect Operational Emissions

82.84

Scope 3: Emissions from Indirect Sources

1,252.27

Projects Designed by the Plant Design Studio

Embodied carbon

Operational carbon (1 year)

41.26 0.33

Projects Designed by Other Architects

Embodied carbon

Operational carbon (1 year)

1,054.27 75.10

Employee Commutes

79.02

Employee Interfacility Travel

0.26

Employee Air Travel

2.03

Total

1,343.55

Scope 1: Direct emissions from Plant Prefab-owned and controlled operations, e.g., carbon emitted in the burning of fuel in company trucks.

Scope 2: Indirect emissions from energy Plant Prefab purchases from a utility provider, e.g., carbon emitted in the generation of the electricity we use.

Scope 3: Indirect emissions not included in Scope 2 that occur upstream and downstream of Plant Prefab’s operations, e.g., carbon emitted in the production and transportation of the materials we use (embodied carbon), the operation of the buildings we prefabricate (operational carbon), and the burning of fuel used for Plant Prefab employee travel.

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Our Projects We’re committed to building the healthiest, highest-performing housing in the most responsible way possible. We believe that this includes not only the materials we use, but also the way we build.

We carefully evaluate each material we specify, considering product safety, performance, and environmental factors like recycled content and embodied carbon. We use finishes with low or no volatile organic compounds (VOCs) and categorically avoid products with known carcinogens. We also tailor the building assembly of each project to its specific climate zone to ensure optimal energy performance and durability­over time.

2021 Production 66,153 ft2 of living space 31 housing units 64% increase in production over 2020

2021 Performance LivingHomes (homes we built that were designed by us) performed an average 10.7% better than local energy code requirements Homes we built that were designed by other architects performed an average 3.1% better than local energy code requirements 100% of all LivingHomes were solar-ready and met ENERGY STAR standards

Goals for Continuous Improvement

Sustainably-Sourced Materials We strive to minimize the embodied carbon of our projects through careful materials choices. Our goal is to use all sustainably-sourced, recycled/recyclable, low-carbon materials. Learn more about our sourcing practices on page 14.

Energy-Efficient Design & Construction We are constantly working to improve the energy performance of the projects we build, and to reduce their operating costs. Our standing goal is to make every project we produce more efficient than local energy code requirements.

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Design by Metro Design Group

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Better Materials for Better Housing

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Finishes and fixtures are often the most scrutinized specifications for owners and their architects, but it’s the materials a builder specifies that drive key project outcomes like building energy performance, indoor air quality, occupant comfort, and carbon emissions.

That’s why Plant Prefab has high standards for the products we build with, and why we stood firm on our commitment to healthy, sustainable, highquality materials throughout 2021 despite extreme supply chain challenges.

Here are a few of the products we are proud to utilize: Insulation: Rockwool Comfortbatt® Unlike common fiberglass insulation, this stone wool product does not absorb water or hold moisture, saving occupants from mold and mildew. Also unlike fiberglass, it is non-combustible and fire resistant, preventing the release of toxic gases when exposed to high heat. Comfortbatt expands upon insertion and doesn’t sag, ensuring that it continues to provide the specified insulative value.

Drywall: USG Sheetrock® EcoSmart Panels Firecode® X This Type X drywall has the same strength and performance characteristics of standard drywall with up to 22% less weight, reducing transportation fuel energy by up to 20%. The 100% USDA-certified bio-based panels have a noncombustible gypsum core and contain up to 94.6% recycled content.

Paint: Sherwin Williams ProMar® 200 Zero VOC Interior Latex Paint Unlike typical paint, this product meets the most stringent health and sustainability requirements, including LEED v4, MPI, and GREENGUARD Environmental Institute standards. Zero VOCs mean no harmful off-gassing, and anti-microbial agents inhibit the growth of mold and mildew.

Sheathing & Moisture Vapor: Huber ZIP SystemTM Compared to standard OSB board and house wrap, this 2-in-1 product incorporates a built-in water-resistive barrier and specially-taped seams to prevent water intrusion, plus continuous foam insulation for enhanced thermal performance. This allows us to use less materials in each project, while providing a better seal at component seams and a more durable building envelope that increases energy efficiency and interior comfort.

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Our Operations We strive to operate in the most environmentally responsible way possible, and we believe that this responsibility includes both our physical infrastructure as well as the people operating within it.

We make our facilities as sustainable as possible, with LED lighting, timers and motion sensors, low-flow water fixtures, double-pane windows, ENERGY STAR-certified appliances, and recycling stations. We track indoor air quality to ensure that it remains within safe levels, and we encourage employees to adopt resource-efficient practices, like bringing their own reusable water bottle.

2021 Consumption 297,154 kWh of electricity consumed in our facilities 400,298 gallons of water consumed in our facilities 750 gallons of propane consumed in our facilities 743 gallons of gasoline consumed in our company trucks

2021 Waste & Recycling 1,400 yd3 of construction and demolition waste generated 76% of construction and demolition waste recycled 880 yd3 of wood recycled into sawdust

Goals for Continuous Improvement

Minimal Waste We have a standing goal to use and waste as little as possible. Our Plant Building System helps us build with up to 30% less waste than site-based contractors, and we sort the waste that we do produce for reuse or recycling. Learn more about our latest waste reduction efforts on page 12.

Carbon Neutrality In 2019 we pledged to become carbon neutral in our operations by 2028. We are working towards this goal by implementing industry-leading sustainability standards and practices to reduce the carbon we consume and emit, both in our operations as well as in the buildings we produce.

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Growing With Integrity

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By all measures, 2021 was a year of incredible growth at Plant Prefab.

We opened a second factory, scaling our operations by more than 30%, and shipped 66,153 square feet of living space—a 64% increase over the previous year. We completed a $30 million Series B financing round and expanded our team with experienced industry leaders. We navigated the persistent threats of COVID-19, labor shortages, and supply chain challenges to deliver for our clients and materially grow our business, and we did so without compromising our commitment to the planet.

As we prepared for the opening of our second factory, a 20,000-square-foot facility in Ontario, California (pictured at left), we looked for ways to offset resource consumption in our existing operations. We determined that we could significantly reduce our electricity usage in our Rialto factory and headquarters by replacing the standard glass windows and doors with solar control low-e products, which we completed just before our Ontario factory came online in June. The result was a 12% reduction in company-wide electricity consumption from the prior year, even with the addition of a second factory. This and other efficiency upgrades helped us achieve a 36% reduction in operational carbon emissions per square foot of production. Together with purchased offsets, we were able to once again achieve net carbon neutrality in our operations in 2021.

We also sought ways to reduce waste on our production floor, and our 2021 project mix offered the perfect opportunity. With a residential development based on four home types and a hospitality development comprised of consistent unit types, a significant portion of our 2021 projects were produced from standardized components utilizing a shared slate of materials. Such repeatability showcased the ability of our Plant Building System to optimize production and material efficiency, enabling a 40% reduction in waste per square foot of production compared to the prior year.

Plant Prefab has always been focused on responsible growth, and our 2021 operations demonstrated this resolve: We grew our physical footprint while reducing our carbon footprint, and we raised our output while lowering our waste.

We’re proud to have delivered on our commitments to Plant Prefab clients and investors, while at the same time standing firm on our commitment to sustainable operations.

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Our Supply Chain We believe that social and environmental responsibility extends beyond our walls. All our suppliers and vendors are accountable to our Supplier Code of Ethics, which asks them to operate in a responsible manner, taking care of their employees and the environment.

We screen suppliers across several dimensions, including but not limited to corporate practices, environmental certifications, and compliance with local laws and regulations. As a company located in a low-income community, we use local partners whenever possible.

2021 Significant Suppliers Significant suppliers are our largest suppliers, accounting for roughly 80% of all non-labor costs.

100% of our significant suppliers were located within 50 miles of our facilities 29% of our significant suppliers were family-owned 43% of our significant suppliers were located in low-resource communities 50% of our suppliers have positive practices that extend beyond what is required by regulations

2021 Materials 30% of our building materials by volume had at least one or more third-party environmental certifications

Goals for Continuous Improvement

Responsible Sourcing We strive to use the most sustainable, lowest-carbon materials we can find.

Our standing goals are to specify locally-sourced materials and to support local suppliers, especially those with female and/or minority ownership.

Reduce Transportation Impact Our Plant Building System uses the most efficient combination of modules and panels to minimize the number of trips required to transport our projects. Our goal is to continue reducing our transportation ton-miles by consolidating more weight on each trip and educating our drivers on fuel-efficient techniques.

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15 Design by The Brown Studio

Overcoming Challenge With Collaboration and Teamwork

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The global supply chain issues that began in 2020 worsened in 2021, causing widespread shortages and staggering price hikes on essential building materials like lumber, steel, gypsum products, and coatings.

Common items that were usually available for immediate delivery from any vendor required weeks-long lead times, while appliances and other complex products became scarce, if not altogether impossible to find.

While many builders were forced to postpone projects, Plant Prefab’s professional supply chain management helped us continue on-time delivery for our clients. Led by a veteran female leader with deep industry expertise, our purchasing team worked closely with project estimators to forecast lead times and research product alternatives, facilitating reliable project scheduling and costing. The purchasing team also coordinated closely with Plant Prefab CAD engineers, helping to produce a reliable, executable bill of materials for every project. The purchase and delivery of each material was carefully timed to align with project production schedules, and teams met weekly to identify, pre-empt, and communicate any potential delays. Strong vendor relationships enabled the successful procurement of hard-to-find items, and a collaborative approach to product selection allowed project teams to balance schedule adherence with budget control.

In the factory, our warehouse staff closely monitored product inventory to ensure that supplies never fell below required minimums. A newly-enacted material control program orchestrated the flow of supplies onto the production floor, ensuring that laborers always had the exact materials they needed at the precise time and place they needed them. Daily checks and bi-weekly reviews facilitated the timely procurement of understocked materials and the efficient use or return of unused items.

Like a well-conducted orchestra, Plant Prefab’s experienced supply chain, engineering, project management, and production teams worked in concert to deliver for our clients through unfathomable challenge. While persistent market volatility exposed weaknesses across the industry, Plant Prefab’s optimized processes showed what’s possible with teamwork, collaboration, and data-driven decision-making.

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Our Employees We know that nothing is more critical to our success than a safe, skilled, and satisfied team. Our Occupational Health and Safety Management System and protocols extend beyond industry standards, including a dedicated committee that meets weekly to review metrics and best practices. Our best-in-class safety record is a direct result of this constant focus on risk mitigation.

We offer competitive compensation, excellent benefits, and many workplace amenities not typically found in our industry. We also invest in our staff with continuous training and opportunities for professional development, helping workers grow with the company by promoting from within whenever possible.

2021 Team 110 full-time employees 18 new full-time employees 12% female employees (industry average: 9.9%)

2021 Performance 92% employee satisfaction rate 1 Lost Time Incident Rate (LTIR) 1 workplace-transmitted COVID reportable

2021 Benefits 100% of our regular, full-time employees have been granted stock options 100% of our regular, full-time employees received bonuses regardless of profit 100% of our permanent employees are eligible for healthcare, vision, and dental insurance benefits

Goals for Continuous Improvement

Safety Safety is our #1 priority across all facilities. We foster a culture of safety awareness that encourages employees to report hazards and offer suggestions. Our goal is to maintain an OSHA Total Recordable Incident Rate (TRIR) below 1.

Culture of Organizational Excellence We aspire to create a culture of organizational excellence in which our employees feel engaged in their work and driven to solve the most important problems in housing. Our goal is to be a coveted employer known for its diverse and world-class talent, employee development, and excellent benefits.

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Investing in Our Most Valuable Asset

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The continuation of the coronavirus pandemic in 2021 drove massive shifts in the U.S. labor market, with unprecedented numbers of workers parting ways with their employers.

Despite historic labor shortages, Plant Prefab’s ongoing commitment to employee safety, benefits, and development helped us maintain a low turnover rate—three times less than the industry average—while attracting top talent to expand our team.

Key hires included Plant Prefab’s first Chief Financial Officer and first Chief Revenue Officer to support capital-raising initiatives and customer acquisition.

We also welcomed Plant Prefab’s first dedicated Safety and Quality Manager to lead risk mitigation and quality assurance programs. Notable 2021 initiatives included broadening our factory safety training and expanding our reporting practices to include all hazards and near misses. This heightened focus on safety awareness reduced the severity of workplace accidents and helped maintain best-in-class illness prevention: we recorded just seven cases of the coronavirus all year, with only one attributed to workplace transmission.

We expanded professional development opportunities throughout the organization, launching a new executive training track for female leaders. We promoted two women to senior leadership positions and supported the development of female managers with one-on-one coaching. In the factory, ongoing cross-training opportunities empowered production staff to learn a new skilled trade, and a new welding qualification program helped metal workers earn certification with the American Welding Society.

We also renovated our Rialto headquarters, creating more offices, meeting spaces, and electric vehicle charging stations for employees and visitors. We invested in new furniture, including ergonomic workstations with convertible stand-up desks and sound-proof booths for enhanced productivity. Factory renovations included a new, enlarged break room for production staff, complete with an upgraded kitchen, microwaves, coffee machines, big-screen televisions, and a reverse osmosis filtration system for purified drinking water.

As a socially responsible company, Plant Prefab has always focused on employee health and well-being. In the challenging 2021 labor market, we were honored to earn the continued trust and approval of our staff with a 92% employee satisfaction rating.

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About Plant Prefab Building a better world, by design.

Plant Prefab is the first Certified B Corporation™ building technology company dedicated to sustainable design, materials, and operations. Our patented Plant Building System™ utilizes advanced digital modeling and fully customizable Plant Panels™ and Plant Modules™ to help architects, developers, general contractors, and consumers design and build multifamily and single-family homes 20 to 50% faster than site-based methods. The system provides better quality control, design flexibility, and time, cost, and material efficiency than traditional methods of offsite or on-site construction.

Plant Prefab has two factories in California (Rialto, Ontario) and a design studio and show home in Santa Monica. We are backed by leading investors including Amazon, Asahi Kasei, Gerdau Paris Ventures, Obvious Ventures, and others.

Our Values Safety First We are uncompromising in our commitment to the health and safety of our employees, clients, and the larger community. Safety is built into our operations, practices, materials choices, and designs.

Lifetime Quality Plant’s design and building practices and processes are honed to deliver the highest quality results for our customers: a beautifully-designed, sustainably-built, durable home.

Less is More Legendary architect Ludwig Mies Van Der Rohe coined this phrase, and we apply it broadly: A home built in less time, for less money, with less harmful stuff, and less environmental impact is, indeed, more.

Lifetime Clients We don’t just build great homes, we build trust. Plant believes that when we deliver the highest-quality homes and the most helpful service, we create relationships that last a lifetime.

Earth Day Every Day We know that buildings have a profound impact on the environment and on people’s health. As a home builder, we feel a daily responsibility to build and operate as responsibly as possible.

Golden Rule It’s a simple, but powerful concept: we treat our clients, suppliers, partners, and each other the way we want to be treated—with empathy, respect, and integrity.

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23 Design by The Brown Studio

plantprefab.com info@plantprefab.com 909.546.7444

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© 2022, Plant Prefab, Inc.